Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
2





GOVT CORP Direct method
€1,120,000
€1,880,000
Step-down (A/HR first)

1,090,000 1,910,000
Step-down (IS first)


1,168,000 1,832,000


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012 The direct method ignores any services to other support departments. The step-down method partially recognises support to other service departments. The information systems support group (with total budget of €2,400,000) provides 10% of its services to the A/HR group. The A/HR support group (with total budget of €600,000) provides
25% of its services to the information systems support group.
3
Three criteria that could determine the sequence in the step-down method are
a
Allocate service departments on a ranking of the % of their total services provided to other service departments.

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